Welcome to the June issue of Licensing4Profits. 

Ingredients are most often thought of as parts of a formula. What you may not know is that many ingredient intellectual properties are created for the purpose of licensing. In this month's Leveraging IP article, learn why these are some of the most valuable IPs and the top reasons to license them.

Do you need money, manpower or capital to commercialize your intellectual property? Take a look at this month's Video Licensing Lesson and find out how to use licensing to get the resources you need.

If you are a business owner, you may be overlooking one of your most valuable assets for expanding and growing your business. Learn how to leverage the full value of your IP assets in our newest e-course; 7 Ways to Grow and Expand Your Business with Licensing.

Licensing agreements can terminate for a number of reasons. In our last article, Key Terms & Conditions, you'll find out what they are and what must be included to deal with the most serious reasons for termination.

Enjoy!

 

Ingredients are often thought of as the different pieces that make up a formula. Many of them are patented, most are kept as trade secrets. What you may not realize is that many ingredient IPs are created for the purpose of licensing them out and integrating them into other formulas and products. Ingredient brand licensing is increasing as consumers pay closer attention to what's inside the products they buy.

 

A trademarked ingredients cannot be replicated, redistributed or remade by anyone other than the IP owner. They are used in various products to boost those products' effectiveness. Branded ingredients also include component parts used inside many products. In some cases, ingredient brands can be a symbol of quality that assures consumers of a product's origin and value.

 

There are many examples of successful ingredient brand licensing programs. One of the most famous is Intel Inside®. They taught consumers to look for the Intel Inside logo as an assurance of quality. This "branded ingredient" is one of the world's largest co-operative marketing programs, with hundreds of computer companies licensing the use of the Intel Inside logos.

 

In the 1960s, Colombian Coffee was a pioneer in the use of an ingredient licensing strategy. At the time, coffee was a non differentiable commodity. Through the Juan Valdez character and the phrase "100% Colombian Coffee", consumers were educated to look for the Colombian Coffee logo as a symbol of excellent quality in the brand they bought.

 

Many ingredient brands are well known and are synonymous with the products that use them. Some of these include:

• Diet soft drinks with NutraSweet
• Stereos with Dolby noise reduction
• Teflon in cookware
• Gore-Tex in outerwear and ski apparel  

 

Increased revenues and lower production costs are often the biggest reasons for licensing ingredient IP. It helps reduce the amounts of other more costly and less "effective" ingredients. Products can sell at higher prices, and a better product creates a bigger competitive advantage.  

 

Licensing a branded ingredient can differentiate your product and add distinctiveness. If your product is a commodity, the ingredient brand can add value and quality. A well known ingredient trademark can build your brand very quickly. Using it on your packaging, in advertising or on your product attracts consumers towards your product. You can take advantage of their consumer recognition and use their research and development to add credibility to your own products.

Feel free to pass this newsletter along to friends and associates. You can visit our websites (www.licensing4profits.com and www.licensingcg.com) to view our blog, special reports, published articles, webinars and audio presentations.

If you are interested in learning about our consulting services, please contact us at (646) 395-9572 or email info@licensingcg.com.  

 

Best regards,

 

President & CEO 

In This Issue

Licensing OPR - Other Peoples Resources

Your business IP is a revenue generating asset. Yet it's an asset you may not be using to its full revenue potential. During this e-course, you'll learn about 7 ways you can use licensing to get the most out of your business IP.  Click Here to Sign Up

The termination clause specifies the how and when a licensor (the IP owner) or licensee can terminate the licensing agreement. In most cases, it will terminate (end) when the original term or the renewal periods end.

 

Some agreements have a clause that allows a contract to be terminated for any reason, or no reason at all, usually with some period of advance notice (e.g. 60 days).

 

Termination is also triggered by a list of events called breaches or defaults by the licensee or the IP owner. Some of the most serious of these are: 

    - Failure to pay royalties 

    - Quality control problems 

    - Bankruptcy

 

In these cases, there is an opportunity to correct the problem (i.e. cure the breach) before the termination is effective.  

When preparing or reviewing a licensing agreement, it's always best to seek qualified legal advice before you sign anything.